Capita Group
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| Type | Public limited company (LSE: CPI) |
|---|---|
| Industry | Business Process Outsourcing |
| Founded | 1984 |
| Headquarters | London, United Kingdom |
| Key people | Eric Walters (Chairman) Paul Pindar (Chief Executive) Simon Pilling (Executive Director) |
| Products | BPO & service transformation Back office administration Customer service Finance & treasury Claims & policy administration HR, staff support & training ICT & software Corporate services Advisory services Property & infrastructure Offshore/near shore solutions |
| Revenue | £2,686.8 million (2009)1 |
| Operating income | £357.7 million (2009)1 |
| Net income | £188.9 million (2009)1 |
| Employees | 36,800 (2009) |
| Website | www.capita.co.uk |
The Capita Group Plc (LSE: CPI), commonly known as Capita, is a business process outsourcing company headquartered in London, United Kingdom. It is the largest business process outsourcing company in the UK, with an overall market share of 27% in 2009, and has clients in central government, local government and the private sector.2 It also has a property and infrastructure consultancy division which is the fourth largest multidisciplinary consultancy in the UK.3 Roughly half of its turnover comes from the private sector and half from the public sector.2
It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
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History
Capita was formed in 1984 as a division of CIPFA (Chartered Institute of Public Finance and Accountancy). It became an independent company with 33 staff as a result of a management buy-out in 1987, led by Rod Aldridge, and was first listed on the London Stock Exchange in 1991. Capita continued to grow year on year.
In March 2006 Executive Chairman Rod Aldridge OBE resigned in the aftermath of claims that contracts awarded to the Group were influenced by his loan of £1 million to the Labour Party. Aldridge resigned saying that he denied the claims, but to avoid any lingering doubts about it, he was leaving the company. Aldridge is a life-long Labour supporter, and had overseen the company's growth from a small company in 1987 to a FTSE 100 member in 2006.4
In February 2007, a Capita office in Victoria, London was subject to a letter bomb attack. One person was injured.5
On October 2, 2009, Capita announced plans to move its main operations from London to Leeds.678
Operations
Capita works across eight markets, being local government, central government, education, transport, health, life and pensions, insurance, and other private sector organisations (including financial services). Examples include television licence fee a contract won from the Post Office for the BBC; management of call centres for many government initiatives such as the London congestion charge (although this has recently transferred to IBM); and provision of IT services, including web hosting and helpdesk support, to many county and city councils, many LEAs, the Driving Standards Agency and the National Rail (NCCA).
Capita manage the Criminal Records Bureau for the Home Office. In 2002, when mandatory CRB-vetting of all workers with children was brought in, a large number of teachers were temporarily unable to work after Capita's systems had difficulty with the workload and were subsequently overwhelmed, meaning that the start of the academic year was delayed in places. Poor systems specifications and last-minute changes in government policy by the then Secretary of State for Education, Estelle Morris are believed to be major causes for these delays.9
Capita Financial Administrators (CFA), was recently fined £300,000 for having poor anti-fraud controls by the Financial Services Authority.10
Capita also provide outsourced HR and Recruitment services for the BBC, though heavily criticised for transferring 260 jobs from London to Belfast11. The contract came into effect on 1 April 2006.
Capita also intended to enter into the legal services market and entered into a funding arrangement with the Law Firm Optima Legal Services Limited which saw them, in the period between May 2006 to the end of 2009 invest a total of £36,700,000 (thirty six million, seven hundred thousand pounds) by way of investment loans into Optima 12. As part of the funding arrangement Capita Group had the option of acquiring the shares of Optima Legal Services for the nominal sum of £1 upon the full implementation of the Legal Services Act 2007 which would make ownership of law firms by the likes of Capita possible. It is thought that such Alternative Business Structures ("ABS") could be lawful around October 2011.13. However, on 9 August 2010 it was reported that the Solicitors Regulatory Authority ("SRA") had found that the arrangement breached its rules in that it effectively amounted to an ABS. 14 As a consequence, Optima Legal Services Lead Litigation and Property Partners, Philip Robinson and Anthony Ruane respectively were both severely reprimanded by the SRA for what was found to be professional misconduct and only narrowly avoided referral to the Solicitors Disciplinary Tribunal 15 and Adrian Lamb, former CEO of Optima Legal Services Limited, left the business in June 2010.16.
Property, Engineering & infrastructure services are provided under the Capita Symonds brand.
Education services
- SIMS.net - Schools Information Management Software a Management information system used in 95% of primary and secondary schools across the country to record many aspects of student data.17 In March 2009, Capita SIMS was said to be responsible for sending a truancy warning notice to the family of a Cheshire school student who had died two months before.18
- Individual Learning Account - A £290million scheme intended to give financial support to adult learners that was opened in 2000 and scrapped in 2001 following widespread and massive fraud.19
- Connexions Card - A £109million scheme that involved issuing 16 to 19 year olds with smart cards that recorded their lesson attendance and rewarded them with discounts on consumer goods. It ran from 2002 until it was terminated in 2006 owing to lack of uptake.20
Financial performance
The Company's results are as follows:
| Year | Sites | People | Turnover (£ million) | Pre-tax profit (£ million) |
| 1984 | 1 | 2 | ||
| 1987 | 1 | 33 | ||
| 1991 | 11 | 320 | 25 | |
| 1992 | 15 | 687 | 33 | |
| 1996 | 60 | 3,500 | 112 | 12.3 |
| 1998 | 80 | 5,000 | 238 | 27.1 |
| 1999 | 100 | 7,000 | 327 | 36.3 |
| 2000 | 120 | 8,500 | 453 | 51.2 |
| 2001 | 140 | 13,000 | 691 | 72.1 |
| 2002 | 200 | 17,000 | 898 | 98.2 |
| 2003 | 210 | 19,000 | 1,081 | 121.2 |
| 2004 | 230 | 23,000 | 1,282 | 148.6 |
| 2005 | 250 | 24,000 | 1,436 | 177.2 |
| 2006 | 250 | 27,000 | 1,738 | 193.2 |
| 2007 | 300 | 29,000 | 2,073 | 228.7 |
| 2008 | 300 | 36,000 | 2,441 | 226.6 |
| 2009 | 300 | 36,800 | 2,687 | 258.1 |
Media profile
Capita is a frequent target of the satirical magazine Private Eye due to its alleged record of incompetence and impropriety.2223
Senior management
Paul Pindar joined Capita in 1987, he has been chief executive since 1999. For this role he is paid £375,000 salary and £525,000 bonus, giving a total annual compensation of £900,000.24
References
- ^ a b c Preliminary Results 2009
- ^ a b "The Capita Group Plc Annual Report and Accounts 2009". The Capita Group Plc. http://www.capita.co.uk/investors/Documents/Capita_AR_2009.pdf. Retrieved 30 August 2010.
- ^ "Capita facts and stats – year end 2009". The Capita Group Plc. http://www.capita.co.uk/investors/Documents/FactsStats2009.pdf. Retrieved 30 August 2010.
- ^ "Capita boss quits over Blair loan". BBC News. 2006-03-23. http://news.bbc.co.uk/1/hi/uk_politics/4836024.stm. Retrieved 2007-02-12.
- ^ Woman hurt in letter bomb blast BBC News, February 2007
- ^ Jobs boost as Capita looks North Yorkshire Post, 2 October 2009
- ^ Capita Financial's London staff placed in consultation process FT Advisor, 30 September 2009
- ^ FTSE 100 financial group in Yorkshire move The Business Desk, 2 October 2009
- ^ "History of checks U-turns". BBC News website. 2002-09-04. http://news.bbc.co.uk/1/hi/education/2237173.stm. Retrieved 2007-02-12.
- ^ Capita Financial fined for Fraud accessed 26/05/06)
- ^ "Unions threaten strikes over BBC's HR outsourcing deal". Personnel Today website. http://www.personneltoday.com/Articles/2006/02/21/34048/unions-threaten-strikes-over-bbcs-hr-outsourcing-deal.html. Retrieved 2007-02-12.
- ^ Capita: Annual Report 2009
- ^ Neuberger MR calls for regulatory reform as ABS timeline is unveiled
- ^ Optima reprimanded by the SRA over Capita investment
- ^ Solicitors Regulatory Authority
- ^ SEO Adrian Lamb leaves Optima - 8th June 2010
- ^ Supplier feels the hand of Becta Guardian, 4 October 2005
- ^ Dead girl given truancy warning BBC News website, 25 March 2009
- ^ Schools scandal hits Capita accessed 26/05/06
- ^ Evaluation of Connexions Card
- ^ Liberata axed from school grant contract IT Pro, 19 November 2008
- ^ Workers Liberty
- ^ Nanny knows best
- ^ "Paul Pindar: Executive Profile & Biography". BusinessWeek. McGraw-Hill. http://investing.businessweek.com/research/stocks/people/person.asp?personId=2989726&ric=CPI.L. Retrieved 2009-09-02.
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